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The Australian Dollar is often looked at as the “Risk On/Risk Off” currency. Back in 2008 the AU$ formed a bearish rising wedge which suggests a two-thirds chance of lower prices. Once the breakdown took place risk assets around the world tanked (stocks & commodities)!
I shared with Premium Members last Thursday that the AU$ was breaking support as EEM was breaking down from its pennant pattern. Premium Members established a Short Emerging markets position in EEV last Thursday.
The last time AU$ broke support investors had few place to hide (not stocks or commodities)…..Will it be different this time?